Fiat says Americas, Asia will support 2013 targets

Marchionne rules out raising more capital to complete Chrysler merger

TURIN (Reuters) -- Fiat does not expect to revise its 2013 targets, although it may become more reliant on growth in the Americas and Asia amid weak European markets, CEO Sergio Marchionne said.

"I don't think we'll need to change our targets over all," Marchionne said at a shareholders' meeting today. "The geographical distribution could change, given the performance of Europe," he said.

Marchionne said markets in North America, Latin America and Asia were growing. Europe's car market, in contrast, is set to remain weak in 2013 after 5 years of sales falls as governments drive through austerity measures to rein in their debts.

Marchionne said he would update investors on Fiat's full-year 2013 targets when the automaker releases first-quarter results on April 29.

Fiat's Chrysler unit posted earnings of $1.7 billion in 2012, up from $183 million in 2011.

Fiat sees sales at 88 billion euros ($115 billion) to 92 billion euros this year, with more than half from North America, and expects to sell 4.3 million-4.5 million cars.

The company expects net profits of 1.2 billion ($1.6 billion) to 1.7 billion euros this year.

Credit Suisse analyst David Arnold thinks the carmaker will likely have to cut its goals when it is forced to retreat from its forecast of a European market fall of just 2 percent. Arnold said the bank's own prediction of a 5 percent contraction "will probably still be too optimistic."

"Earnings forecasts at Fiat are going down and will continue to do so," he said in a note to investors.

Credit Suisse sees Fiat's European losses to reach $978 million this year, before interest and tax.

Chrysler merger update

Separately, Marchionne said he ruled out a capital increase to buy the 41.5 percent in Chrysler that Fiat does not already own.

"There is no need at the moment for a capital increase for the merger with Chrysler," Marchionne said.

Fiat wants to acquire the rest of Chrysler and merge the companies in order to gain financial synergies and access to Chrysler's cash flow by the end of 2014. Stock in the merged company may be listed in the U.S. in addition to Italy, Marchionne has said. It is not clear where it would be headquartered.

Marchionne said Fiat has enough resources already to buy the remaining stake in the unit from the UAW's retiree health care fund, known as VEBA. Fiat would consider disposing of some assets to control debt in the event the carmaker acquires full control of Chrysler, he said.

“If we ever reach a deal with VEBA to buy the remaining stake, we have enough cash for it,” Marchionne said. Fiat may “monetize assets” to maintain its financing, he said, without specifying what the company may sell.